PMB Receives AfCFTA Report As Panel Recommends Approval

There are strong indications that President Muhammadu Buhari may sign the Africa Continental Free Trade Area (AFCFTA) agreement next week in Niger Republic.

The renewed hope came yesterday in Abuja when the president received the report of the committee which assessed the impact of the AFCFTA on Nigeria.

Although, the president did not commit himself to signing the agreement, LEADERSHIP Friday learnt that he may endorse it next week at a meeting of the African Union (AU) in Niger Republic to ratify the AFCFTA.

Buhari, however, remarked that signing the agreement would have negative and positive impacts on Nigeria’s economy.

His statement, has, however, caused anxiety among the opponents and proponents of the agreement, who have taken opposing stance on the AFCFTA.

The president recalled that it had been over one year since the AU Heads of State adopted the Phase I Agreement on the AfCFTA at its 10th Extraordinary Summit in Kigali, Rwanda, on March 21, 2018.

Since then, he noted that a lot had been said about Nigeria’s decision to conduct a detailed study on how the agreement would impact the country.

He said: “Let me state unequivocally that trade is important for us as a nation and to all nations. Economic progress is what makes the world go around. Our position is very simple: we support free trade as long as it is fair and conducted on an equitable basis.

“The AfCFTA will have both positive and negative effects on us as a nation and on our region. As Africa’s largest economy and most populous country, we cannot afford to rush into such agreements without full and proper consultation with all stakeholders.

“As you mentioned in your report, intra-African trade is only 14 per cent of Africa’s total trade. Our consumption is mostly of goods imported from outside the continent. For AfCFTA to succeed, we must develop policies that promote African production, among other benefits.

“Africa, therefore, needs not only a trade policy but also a continental manufacturing agenda. Our vision for intra-African trade is for the free movement of ‘made in Africa goods’.

“That is, goods and services made locally with dominant African content in terms of raw materials and value addition. If we allow unbridled imports to continue, it will dominate our trade. The implication of this is that coastal importing nations will prosper while landlocked nations will continue to suffer and depend on aid,” Buhari said.

The president also recalled that during the inauguration of this committee, “many of the challenges we face today, whether security, economic or corruption are rooted in our inability, over the years, to domesticate the production of the most basic requirements and create jobs for our very vibrant, young and dynamic population.”

Henceforth, Buhari stated that the federal government would ensure that negotiated agreements create business opportunities for Africa’s manufacturers, service providers and innovators.

Buhari said: “The AfCFTA we aspire to have should, therefore, not only create wealth for investors but also jobs and prosperity for our vibrant and hardworking citizens. The benefits of economic growth must be prosperity for the masses.

“I am delighted to receive your report today and with the time spent, skills applied and energy invested, I am confident that the committee has been thorough and diligent.

“Let me assure you that your report will form part of the consideration in our decision on the next steps on the AfCFTA in particular and on broader trade integration subjects,” he said.

While presenting the report, the committee’s chairman, Desmond Guobadia, said that the members reviewed over 200 submissions from farmers, bankers, manufacturers, government agencies and development partners.

He said that the study had shown that the AfCFTA was not without major risks and undesirable impacts, adding that the most obvious of them is the potential rise in smuggling and abuse of rules of origin.

According to him, the risk is that it will provide incentives for traders to disguise goods imported from outside the continent as made-in-Africa to qualify for duty-free treatment.

Guobadia said that this risk is high for Nigeria considering that 92 per cent of Nigeria’s imports come from the rest of the world and smuggling, under-reporting of imports and other forms of abuse of rules of origin already constitute major challenges in Nigeria and in the West African sub-region.

While recommending that Nigeria signs the agreement, the committee, however, suggested some   safeguards.

He said: “Our report recognises that there will be significant adjustment costs to manage the negative impacts and to take advantage of the opportunities. The adjustment costs will include retraining workers in declining sectors to be able to take up employment in growing sectors, providing capital to business owners to retool their plants to remain operational and attracting investments to growing sectors in order to produce goods and services to export to Africa.”

The committee further proposed policies, programmes, projects and interventions which may position Nigeria adequately for the AfCFTA.